Ethereum’s Future: What ETH Whales Reveal About 2019’s Patterns

Table of Contents

• Key Points
• Price Pattern Analysis
• Whale Accumulation and Exchange Netflows
• Ethereum ETF Update

Key Points

Ethereum’s price action is currently mirroring its 2019 pattern, suggesting a potential upswing. ETH whales are actively accumulating Ethereum, with negative netflows on derivative exchanges indicating reduced selling pressure. As we near the end of 2024, market sentiment around ETH is shifting from bearish to bullish.

Price Pattern Analysis

The price action of Ethereum shows a pattern akin to its 2019 trend, characterized by an ascending wedge formation. Notably, the higher lows of the current cycle’s wedge are significantly larger than those from 2019. In 2019, Ethereum’s price fell below its ascending wedge before the first Federal Reserve rate cut. A similar scenario is unfolding in 2024.

Following the 2019 rate cut, ETH/USD and ETH/BTC hit their lows, marking a strong confluence. The expectation is that the current pattern may replicate this outcome, with a possible price drop below the wedge, capturing liquidity before a potential reversal in late Q4 2024 or early Q1 2025.

Should Ethereum’s price remain below the ascending wedge for an extended period, further analysis may be required to adjust strategies or manage potential risks.

Whale Accumulation and Exchange Netflows

Ethereum whales, who hold a significant portion of ETH, are crucial to the anticipated upward movement. Since 2019, whale accumulation has increased, with a notable acceleration following the Shanghai upgrade in early 2023. Currently, whales control over 43% of Ethereum’s circulating supply, nearing the 48% held by retail investors.

Data on Ethereum’s exchange netflows reveal a negative netflow exceeding 40,000 ETH on derivative exchanges. This indicates a shift of ETH from exchanges to cold wallets, reducing selling pressure. Traders appear to be positioning for long-term gains, suggesting that the current price decline might be a temporary correction.

Ethereum ETF Update

Recent trends in Ethereum ETFs show mixed signals. Despite some negative net-flows in Ethereum ETFs, there have been positive inflows, including those into Fidelity’s ETF. Grayscale’s ETHE experienced the largest outflow, the only one noted recently. Overall, the positive sentiment surrounding ETFs could potentially bolster Ethereum’s future price growth.